(Corrects seventh paragraph to remove reference to Diamond Offshore Drilling as one of Loews' businesses, Diamond Offshore was deconsolidated from Loews' balance sheets in 2020)

Nov 12 (Reuters) - A Delaware judge on Friday ordered Loews Corp to pay $690 million to former Boardwalk Pipeline Partners LP investors who claimed they were shortchanged in a July 2018 buyout.

Loews said it planned to appeal the decision by Vice Chancellor Travis Laster of the Delaware Chancery Court, who ruled in a class action challenging the $1.5 billion transaction https://www.prnewswire.com/news-releases/loews-reports-exercise-of-right-to-purchase-common-units-of-boardwalk-pipeline-partners-300674927.html.

In a 194-page decision, Laster said New York-based Loews, which controlled Boardwalk's general partner, breached the natural gas pipeline company's partnership agreement in exercising its right to buy out the limited partners.

Laster said the buyout undervalued the limited partners' stake by 31%, and that they deserved $17.60 per unit instead of the $12.06 they were awarded.

He said Loews obtained the bargain price after its lawyers "worked hard" to obtain a favorable legal opinion concerning Houston-based Boardwalk's tax and regulatory status, including rulemaking by the Federal Energy Regulatory Commission.

"The opinion was a contrived effort to reach the result that the general partner wanted," Laster wrote. "(It) did not reflect a good faith effort to discern the facts and apply professional judgment."

Loews' other businesses include the CNA property and casualty insurer, and Loews hotels. It took Boardwalk public in 2005.

Shares of Loews were down 56 cents, or nearly 1%, at $57.00 in early afternoon trading on the New York Stock Exchange.

Loews Chief Executive James Tisch in a statement said the company believed Laster "misinterpreted both the factual underpinnings of the case as well as the applicable law."

A. Thompson Bayliss, a partner at Abrams & Bayliss representing the plaintiff investors, said Laster's decision vindicated their rights.

"From the beginning, the defendants claimed our case was meritless," Bayliss said in an email. "We are grateful to have had the opportunity to prove them wrong."

Laster ruled after holding a four-day trial in February.

The case is Bandera Master Fund LP et al v Boardwalk Pipeline Partners LP et al, Delaware Chancery Court, No. 2018-0372. (Reporting by Jonathan Stempel in New York; editing by Jonathan Oatis)